[Undressing the Big Verticals: Finding Disruption Strategies in Greater Southeast Asia]
Huge businesses online and offline wear a facade of dominance. In a world where software and cloud storage is cheap compared to even five years ago, these facades are just facades.
Any smart founder who can understand a niche market and its customers, can disrupt these businesses by offering a much better experience to a global set of users, simply by showing that the emperors wear no clothes.
Take a look at the first photo. Each of the eight startup companies in the first image were taken out of the listings page (literally) of online classifieds business Craigslist, depicted in the second picture. This platform's offerings became so big and varied that it suffered from entropy.
The markets tapped into by these startups are bigger than what Craigslist alone could utilize. Meaning that the gold threads Craigslist was wearing were really just a myth. As submarkets became exploitable, startup founders started picking them off.
These two images offer great insights for founders in Greater Southeast Asia, where businesses are sometimes conservatively managed, and where conglomerates and gigantic industry players operate in large local markets.
This is because the new companies do one niche thing very well dating; food; home-sharing, etc. In a mobile-use heavy market, people love these apps. The focused offerings and their ease of use make them fun to use, and they solve problems quickly and efficiently.
Why does this happen? What should founders in GSEA do with this information?
1. There are two reasons why this happens. First, big platforms trying to do everything for everyone will find it hard to manage all of the areas of the business. It's a result of organizational entropy. Consumers in a diverse global software environment will be easily distracted by new choices that big organizations cannot exploit in a fast way.
It also happens because founders using cheaper and more agile software tools can find niche areas in big platforms that they can exploit much more quickly, and offer to consumers using a better user experience. They understand the needs of the niche customer better. They find ways to make it interesting and engaging.
After all, swiping left and right on Tinder is actually really fun and an engaging use of time. Right?
2. Founders in GSEA are working in a region where it should be relatively easy to find big industry players in the market and find ways of disrupting their existing dominance.
In a region that is still relatively conservative in business compared to the rest of the world, and where large conglomerate players usually dominate the local markets, software disruption is primed and ready.
If you would like to test out exploits and software platform ideas in niche areas dominated by big industry players in a gigantic market, check out our accelerator class #20.
We are taking applications until December 16. Join here: http://bit.ly/AWdisrupt
Image source: Platforms vs Verticals and the Next Great Unbundling by a16z -- https://a16z.com/2019/09/11/platforms-verticals-unbundling/
Doug Crets
Media and Communications, AppWorks Accelerator
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